Overall a lot of the textures are blurry. Having it setting helps since once on medium the compression artifacts really mess it up.

When you playing, keep in mind that even though it looks lower res than any other game, it's still using just as much memory as a texture probably 4 times as detailed because it has seperate effects like the specular, bumpmapping, etc. They could have made it more detailed, but it's just the limitation of current hardware.